Nevada Regulator, PUC, Gets It Wrong, Big Time.

utility deathspiral infographic PUC

Nevada Regulator (PUC) eliminates “retail rate” net metering for new and existing customers.  This is probably the most anti-solar regulation that we’ve seen so far.  In New Mexico, current solar customers enjoy net metering, which means the solar generates electricity and then turns the meter backwards in an equal 1 to 1 rate exchange.  A system sized offset to annual usage means the annual electricity used is around zero.   Taking away net metering means that solar customers pay more for their electricity than the amount they get paid to generate it from their solar investment.  In Nevada, the proposed change from 11.6 cents per kWh to 5.5 cents per kWh is a big hit.  To make matters worse, the PUC approved additional fixed charges, a number the regulators left up to the utility to determine.  According to Greentech Media, “Solar companies say the changes will lower net metering compensation to the point where rooftop solar no longer makes economic sense.”  Indeed, this is a disaster for customers who entered into 30 year lease agreements.  These customers will pay the solar company an agreed rate (which is less than their current monthly bill, but increases around 3% per year for 30 years) AND pay the utility company a solar access fee plus the difference between the retail rate and the new “wholesale” rate.  In fact, the two leading national solar lease providers, Solar City and Vivint Solar, announced that they will leave the state if this measure passes, taking approximately 6,000 jobs with them.

This seems, to us, to be a short term “solution” for a utility beleaguered by the influx of solar energy and decreased demand, as we covered here. With the advancement of battery storage technology, those with means will disconnect from the grid, leaving fewer connected rate payers (and higher rates).  It is what is known as the utility death spiral, a dangerous recursive loop which results in bankrupt utilities due to lower demand and stranded assets, like unused coal mines.  As we’ve seen in other sectors, regulations and monopolies rarely succeed in holding back disruptive technologies like renewable energy.  It’s time for vested interests in old technologies and business models to find a new way to work toward a clean economy and build local economies alongside the renewable energy industry. For more on this, check back tomorrow for our “Solutions” finale to the NM Rate Case Series.

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